Optimism [OP] has experienced a significant decline of 29% in value over the past ten days, erasing all the gains it had made from 9 to 26 April. Currently, the market sentiment for OP remains bearish as sellers continue to dominate, indicating the possibility of further losses in the near future.
Despite the prevailing bearish trend, there is a potential for a market shift if Bitcoin [BTC] displays a bullish behavior. However, at the moment, Optimism bulls are facing rejection and are forced to retreat.
Analyzing the 1-day market structure of OP, it is evident that the price has not surpassed the recent lower high at $0.92, which was set back in mid-March during a four-month downtrend. Following another lower high at $0.842, the bulls have struggled to gain momentum. The OBV has returned to its early April lows, while the Awesome Oscillator indicates a bearish momentum shift as it falls below the zero line.
With the resurgence of selling pressure and a shift in momentum, the longer-term bearish market structure is reinforced, suggesting further losses for OP investors and swing traders. A potential drop below the local support level at $0.59 could signal a further decline to $0.51, providing an opportunity for traders to initiate short positions upon a retest of the $0.59-level as resistance.
On the other hand, the 1-month liquidation map reveals high leverage short liquidations above the current price, indicating the presence of liquidity overhead. This could potentially lead to a minor price bounce despite the bearish momentum and market structure. The $0.6-$0.63 range presents an attractive short-term target, offering short sellers an opportunity to enter the market following a price bounce in the coming days.
It is important to keep an eye on the overall bullishness of Bitcoin as it could influence the price action of OP in the short term. As always, it is necessary to exercise caution and conduct thorough research before making any financial decisions.
Please note that the information presented in this article is solely the writer’s opinion and does not constitute financial, investment, trading, or other types of advice.
Sources:
– OP/USDT on TradingView
– Liquidation Map by Coinglass